Stars Case Analysis

Topics: Competitor analysis, Encyclopædia Britannica, Porter five forces analysis Pages: 5 (1585 words) Published: September 26, 2010
STARS Air Ambulance Case Analysis

The importance of Information Systems for STARS
According to Encyclopaedia Britannica, an information system is defined as, “an integrated set of components for collecting, storing, processing, and communicating information”. The entry says that often times, businesses will rely on information systems to help “manage their operations, compete in the market, and supply their services” (Britannica). In the case of STARS, this is no different. The air ambulance service relies on information systems to manage its operations in the form of the communication technology between the operator, the airborne team, and sometimes the doctors who provide medical assistance. They use information systems to compete in the market particularly on internal affairs such as structuring the organization, managing human resources, and processing accounts. When supplying their services, STARS has set up a very convenient system by which a call from a 911 dispatcher is made to the ELC, and eventually to the helicopters that will carry out the mission. These people, processes, and technologies also constitute a well-oiled information system. These systems are crucial to the day-to-day functionality of the organization.

STARS’ competitive strategy and its effect
STARS has employed several tactics to gain the winning position in the market. These tactics are used to combat the threats mentioned in Porter’s Five Forces model. In order to beat competitors and eliminate the threat of new entrants, STARS has expanded its services to five helicopters that serve all of Alberta. This implements economies of scale and market access, expanding their business to occupy more of an already small market, leaving less room for any new competitors. Also by making their services so easily accessible in the market, they are gaining the competitive edge on competitors. Furthermore, to eliminate the threat of substitute products, STARS has improved their performance by including additional features on their helicopters and in their offices to maximize efficiency. The red and white paint job that gives the fleet a recognizable look redefined the bland products and services and made them a legitimate brand. There is also a switching cost for a client trying to change to a new service. This is because STARS has a very convenient and strong relationship with the people hospitals and the 911 dispatchers, and has developed an efficient process for carrying out missions. The book, Knowledge and Special Libraries by James M. Matarazzo, Suzanne D. Connolly has a chapter by Michael Porter that says technology “creates competitive advantage by giving companies new ways to outperform rivals” (Matarazzo 86). STARS makes good use of this tactic by constantly upgrading the technology on their helicopters, such as the internet communication lines by which doctors in the hospital can provide medical assistance to the crew onboard. When the strategies mentioned above are implemented correctly, STARS generates more revenue. This leads to more revenue for the company, and therefore more benefit for stakeholders.

Current successes and future plans
Currently, STARS’ strategies have been very successful. They dominate the market for air ambulances and there is very little room, if any, for new entrants or competing products. Therefore, in moving forward, STARS must think of ways to maintain their advantage and prevent any potential threats from arising. According to Porter in Strategic Planning: Readings, “the potential rival’s expectations about the reaction of existing competitors will influence its decision on whether to enter”. He says that there are three scenarios under which a potential competitor will reconsider entering the market; first, if the incumbents possess substantial resources to fight back, second, if the incumbents seem likely to cut prices to keep market shares, or third, if the industry growth is slow and the existing...
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